Let’s address Fringe Benefit Tax (FBT) first.  The costs associated with Christmas parties held off site i.e. at a restaurant, will be subject to FBT unless the benefits are ‘exempt minor benefits’.

‘Exempt minor benefits’.  The Christmas party costs may qualify as an ‘exempt minor benefit’ if the cost of the Christmas party is less than $300 per employee. The benefit provided to an associate of the employee may also be a minor benefit and also exempt from FBT where the cost of the party for each associate of an employee is also less than $300.

Where possible we want to minimise our FBT liability as it is subject to 47% tax.

Now for the second part of the equation. The tax deductibility of Christmas parties.

The cost of providing the Christmas party is tax deductible only to the extent that it is subject to FBT. Therefore, if the costs are exempt from FBT per the definition above than your business cannot claim a tax deduction for the Christmas party expenditure.

What about clients? Note the cost of entertaining your clients is not subject to FBT and it is not tax deductible expenditure.

Tax deductions and fringe benefit tax (FBT) pertaining to Entertainment and Christmas parties can be quite complicated. Should you have any questions please feel free to contact Peter Quinn by submitting an enquiry or calling us on +61 2 9580 9166.

The post Christmas Parties & FBT: What you need to know appeared first on Quinn Financial Planning.

If you have a SMSF and you have neither lodged your 2019 SMSF Annual Return nor successfully applied for an extension of time then your SMSF ATO status may be changed from ‘Registered’ to ‘Regulation details removed’. (Please note if you are a client of Quinn’s we have successfully obtained an extension of time for all our clients SMSF Annual Return).

What are the implications of the change in status?

‘Registered’ is good. A ‘Registered’ SMSF is able to accept contributions from the members employer, transfers, rollovers and directed termination payments.

These funds importantly qualify for the Concessional Tax rates.

‘Regulation details removed’ this is not so good! Employers will not make any superannuation guarantee (SGC) contributions into the SMSF. Also, APRA funds will not rollover any members benefits to the SMSF.

Please note that the ATO have advised that from 1 October 2019 if the lodgement of the SMSF Annual Return is more than two weeks overdue, the status of the SMSF will be changed to ‘Regulation details removed’.

At Quinn Financial Planning we pride ourselves on increasing the wealth and financial security of our clients. If you’re looking for a financial planner in sydney to help build your wealth, get in touch with Peter Quinn by filling out our contact form, or give us a call on +61 2 9580 9166 to book an obligation free appointment.

The post SMSF Annual Returns: Registration Status appeared first on Quinn Financial Planning.

If so, you need to be aware that over 10% of this category are subject to ‘elder financial abuse’.

Elder financial abuse is the improper use of money or assets of an elder person. Commonly it includes such behaviours as using their finances without their permission. Or a family member using a legal document such as an enduring power of attorney for personal gain as opposed to acting in the best interest of the principal, who in this case is the elder.

The parties inflicting this elder financial abuse tend to be family members, friends or carers. That is, strangely, people close to them.

Things to look out for include;

• Unexplained change to their power of attorney
• Changes to their will
• Changes to the ownership or title of their assets
• A person/friend who is regularly making decisions on their behalf
• Money transferred from their bank account to a family member(s) and/or friend(s) account
• Closure of bank accounts, and/or sale of investments

Should you require any further information please feel free to contact us or call 1800ELDERHelp (1800 353 374).

The post Elder financial abuse: what to look out for appeared first on Quinn Financial Planning.

A common example is where we act as guarantor for someone for, say, a car loan (for example, your son), and your son cannot make the repayments. If the car is repossessed, and your son cannot meet the residual payment you, as the guarantor, may be liable.

A more compelling example is where parents act as guarantor on the loan for the building cost of their children’s home, the children go through financial difficulties, or a divorce and cannot afford the completion of the build.

Another, unfortunate but common example is where you own joint assets and your partner has an uncontrollable gambling habit. The gambling habit may result in your partner owing others money which could result in joint assets being used to repay those debts.

Small business owners can incur financial issues where they are unable to pay their debts to employees, contractors or suppliers because a major client fails or is unable to pay them.

Therefore, assets that are held in your name may be at risk if such financial action is taken against you.

However, your superannuation has unique status, it is generally protected from such action. This is the case where you have being making regular contributions to your superannuation fund before this financial matter arose. Please note that it is generally too late to make sizeable contributions or make asset transfers to your superannuation fund once the matter has arisen.

The protection of your superannuation assets is clearly very important as you have a much greater chance of rectifying your financial independence, if you have a superannuation balance after the financial matter is resolved than if there were no superannuation nest egg.

At Quinn Financial Planning we pride ourselves on increasing the wealth and financial security of our clients. If you’re looking for a financial planner in sydney to help build your wealth, get in touch with Peter Quinn by filling out our contact form, or give us a call on +61 2 9580 9166 to book an obligation free appointment.

The post Superannuation and protecting your investments from legal action appeared first on Quinn Financial Planning.

Below are five financial planning tips that I believe that we should be teaching our children. But before I delve onto those five tips I would like to point out one overwhelming fact. If we go back to our childhood and we think of others that we went to school with, we could probably surmise:

• We had similar parents
• We lived in the same or similar suburb
• We went to the same school so we had the same teachers
• We all sat the HSC or equivalent
• We probably all went to university or the equivalent

However, if you go back and compare your financial wealth and security now, there will be a massive range of difference between your school friends. Many readers will assume that the wealthier classmates were smarter or had higher paying jobs. I can assure you that from my experience this is rarely the case. The wealthier people tend to take better control over their finances, they tend to set financial goals and make better investment decisions.

1. The basis of equation of life

EARN MONEY      →         PAY TAX     →         SPEND              =             SAVINGS

We are all aware of the above formula. Most people interrupt this formula as they need to earn more, pay their legally responsible taxes and the balance or remainder is what they choose to save or to spend.

2. Earn money

In the above formula most people place the most emphasis on the “Earn Money” category. That is, the more we are able to earn, the more they can save or spend. While this is no doubt true, my experience is that generally the wealthier clients are not the clients that necessarily earn the most income however, they are clearly not the ones that earn the least income either. They are generally the people in the middle that focus on their savings, spending and investments.

3. Spending vs saving

I am sure you have all heard of the term compound interest or reinvesting to compound your wealth, so I won’t go into it here. But what I have found over the last 30 years is that the people with the greatest wealth do not save the remainder of their pay packet, they spend the remainder. Clients that have accumulated the most wealth adhere to the following formula.

EARN MONEY      →         PAY TAX     →       SAVE/ INVEST REGULARLY  =  REMAINDER TO SPEND

4. Start early to create a good habits

True story. Two single male clients, both in their early thirties, both share a house together and pay the same rent. Both earn very similar income.  I know because I completed their tax returns. One purchased a brand new BMW and is extremely well dressed, looks very successful. The other buys an average investment property, drives a not so great car, and presents professionally but maybe a little less fashion conscious.

Twenty years later the first client is complaining about how expensive property prices are, the second client has paid off his mortgage and moving on with life.

5. Don’t try to ‘keep up with the Jones’

When you see someone driving a nice car, for example you see a shiny new car, from where I sit I see the car and the debt. If you want a nice car that is fine but save for it, as you would save for a deposit on a home. Don’t borrow 100% to acquire it.

Most Australians have made money from purchasing a property whether that is an investment property or their home. The main benefit I see in buying a home is that you will have a roof over your head and you will not need to pay rent for the rest of your life. The second benefit I have seen is that it teaches people to save by making a monthly commitment to paying their mortgage. The third benefit is that property prices over the long term tend to grow at a greater rate than inflation.

At Quinn Financial Planning we pride ourselves on increasing the wealth and financial security of our clients. If you’re looking for a financial planner in sydney to help build your wealth, get in touch with Peter Quinn by filling out our contact form, or give us a call on +61 2 9580 9166 to book an obligation free appointment. 

The post Teaching your children the importance of money, saving, and financial planning appeared first on Quinn Financial Planning.

The Australian Taxation Office is targeting Australian taxpayers who are not declaring their earnings from overseas investments.

Generally speaking, an Australian resident taxpayer is taxed on his or her worldwide income, regardless whether that same income is taxed overseas.

Typically foreign income includes income earned on overseas investments, salary and wages from working overseas, foreign pensions, capital gains from the disposal of overseas assets and business and consulting income from overseas clients.

There are some exception to the above:

1. where the taxpayer is classified as a temporary resident, and
   
2. where the proceeds are from a gift from an overseas relative.

Should you be unclear as to whether you should declare income from overseas in your Australian tax return, feel free to contact Peter Quinn by filling out our contact form, or give us a call on +61 2 9580 9166 to book an obligation free appointment.

The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.  It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.   

The post Tax on Income from Overseas Investments appeared first on Quinn Financial Planning.

The ATO has sent a letter to 17,700 trustees of Self-Managed Superannuation Funds (SMSF) questioning whether the assets within the Superannuation fund are too concentrated within one asset class rather than diversifying the investments across a number of different asset classes to spread or minimise any potential risk?

The 17,700 people contacted by the ATO hold 90% or more of the funds’ assets in one asset class such as property.

It is important to note that you do not need to have diversity in your fund but you need to prove that the lack of diversity is an active investment strategy. For example, if you are in your 60’s or 70’s and the only asset in the superannuation fund is a geared property than you need to consider, for example, how will that debt be paid off?  How will the superannuation fund pay your retirement benefits if it has debt commitments? Are you planning to make contributions to the SMSF over time, prior to retirement, in order to extinguish this debt? Are you considering making a downsizers contribution? A downsizers contribution is where you sell your home in the future and moving into a more modest dwelling and contributing the surplus funds to your superannuation fund. Note conditions apply to making a downsizers contribution.

Clearly your answers to the above questions and your superannuation investment intentions are very different if you are say a 30 or 40 year old on a large wage making sizeable concessional contributions to your SMSF.

The important message here is that you must have an investment strategy that is appropriate for the members of the fund and you must be able to justify your strategy if the ATO ask.

If you require any assistance with your Self Managed Super Fund, or are looking for a financial planner in sydney to help build your wealth, get in touch with Peter Quinn by filling out our contact form, or give us a call on +61 2 9580 9166 to book an obligation free appointment. 

The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.  It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.   

The post Diversification, Asset Classes, and Your SMSF appeared first on Quinn Financial Planning.

This survey measures household wealth by adding up all the assets owned by the household and subtracting all debts.

In summary the key finding were:

• the average household wealth is $1.02 million

• the average household wealth has increased by 36% over the past 12 years

• 20 per cent of households have a net wealth of greater than $3.2 million

• rising house prices are the biggest contributor to the increase in household wealth
  
• 22 per cent of households own a property in addition to their home
  
• the average home loan is $102,600.

• the average student loan is $3,000

Another survey The Roy Morgan Wealth Report revealed:

• 49.8% of Australians wealth continues to be held in the form of owner-occupied housing.

• Superannuation accounts account for 24.4% of Australian wealth. This was up from 19.2% in 2007.

• Since 2007 to 2019 the value of assets owned by Australians have almost doubled over that period, whilst the level of debt increased by 78.6% over the same period.

It is important to note that 2007 was just before the Global Financial Crisis when markets and investments were at their peak.

At Quinn Financial Planning we pride ourselves on increasing the wealth and financial security of our clients. If you’re looking for a financial planner in Sydney to establish, grow or maintaining your wealth please feel free to contact Peter Quinn on 9580 9166.

The post How does your net wealth compare to other Australians appeared first on Quinn Financial Planning.

The post Economic Update for August appeared first on Quinn Financial Planning.

The following quick quiz will help you determine whether you are comfortable with the success of your saving and investment habits.

Do you remember the first full-time salary you earned?

If so write it down.    

Do you know the highest salary you were paid? (For most people this will be their current salary.)

Write it down.

Total the two salaries. Divide by 2 to get the average .

Multiply this average figure by the number of years that you have been working.

Total Gross Income you have received to date

Note:  If you are married you should have your spouse also complete the above and add the two gross incomes together.

Now do a list of your Assets:

• Home
• Car                                                  
• Investment Property
• Bank account
• Shares
• Superannuation
• Other                                                             

Total      $___________________

Now do a list of your Liabilities:

• Mortgage
• Credit card
• Car loan
• Personal loan
• HECS/ HELP debt

Total      $___________________

Subtract the total Liabilities from the total Assets

Are you happy with the assets you have acquired so far during your working life?

What areas do you feel need improvement?

From my experience the people with the highest salary are not necessarily the most financially independent. It is probably 70% disciplined saving and 30% earnings or income.

To accumulate wealth you need to set goals, create a strategy to achieve these goals and regularly monitor your financial position.

If you are looking for a financial planner in sydney to help build your wealth, get in touch with Peter Quinn by filling out our contact form, or give us a call on +61 2 9580 9166 to book an obligation free appointment. 

The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it.  It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.   

The post Are you a saver or a spender? Try this quick quiz appeared first on Quinn Financial Planning.